BNP Paribas SA will no longer finance private prison companies, joining a wave of banks pulling out of the business amid criticism of the conditions in U.S. detention facilities.
“This decision is the result of the bank’s internal and external consultative process that ensures that clients’ practices are aligned with the group’s policies,” BNP Paribas said Saturday in an emailed statement. “Today, BNP Paribas has a limited exposure to this sector and following its latest decision, the bank will no longer commit to new financing facilities within this sector.”
Protesters have pushed lenders to abandon private prison companies, citing conditions in facilities that have held immigrant families. Senator Elizabeth Warren, a Democratic presidential candidate, has said she would ban private prisons if elected.
Shares of the two biggest for-profit prison companies, Geo Group Inc. and CoreCivic Inc., have lost about a fifth of their value since mid-June, compared with the 4.4% gain in the S&P 500 Index.
“It’s unfortunate that misleading political activism has been allowed to impact a more than a decade-long banking relationship,” GEO Group said in a statement. “The divestment efforts against our company are based on a false narrative and a deliberate mischaracterization of our role as a long-standing government services provider.”
JPMorgan Chase & Co., the biggest U.S. bank, said in March it would no longer provide financing for the industry and Bank of America Corp.followed suit last month. SunTrust Banks Inc., the lender merging with BB&T Corp., withdrew from the business last week.
The decision by Paris-based BNP Paribas was reported earlier by Reuters.